S4C today received another hammer blow, with the revelation the BBC is to cut the amount it spends on programming for the Welsh-language broadcaster by £4m, or 17%, annually.

The reduction will mean that by the end of 2013 the budget for the BBC Wales-produced and licence fee-funded S4C programming ,which includes long-running soap Pobol y Cwm, will be £19.5m, down from £23.5m a year.

BBC Wales executives informed staff of the planned cuts today. BBC Wales employs about 1,000 staff, of which some 150 work directly on S4C programmes.

A BBC Wales spokesman said it was "too early" to say what the budget cut would mean in terms of job cuts. "It's only about finance at the moment," he added.

An S4C spokesman described the BBC move as a "double whammy".

Under a statutory agreement that dates back to the launch of S4C in 1982, BBC Wales is required to supply a minimum of 10 hours of Welsh-language programming a week for the Cardiff-based broadcaster, a total of 520 hours a year. The hours provided to S4C have grown to 690 annually, and are expected to be trimmed, but not reduced below the minimum.

This is funded by the licence fee on top of S4C's annual direct government grant, which is currently £101m a year – but facing a cut of 25%-40% as part of the coalition's spending review.

This S4C output has been protected from the annual efficiency cuts of 5% being imposed throughout the BBC.

However, BBC executives are understood to have decided the current level of Welsh-language programming funding is unsustainable and is outstripping spending on English output for the majority of people in Wales. BBC Wales has said it is looking at broader ways to collaborate with S4C.

Separately, S4C has today delivered its report to the culture secretary, Jeremy Hunt, on how it proposes to meet the spending review cuts, the full details of which will be unveiled by the chancellor, George Osborne, on 20 October.

S4C said it would not be advertising for a new chief executive until after Osborne's announcement. MediaGuardian.co.uk reported yesterday that Guto Harri, the former BBC political correspondent who is now London mayor Boris Johnson's PR man, has been linked to the job.

Iona Jones, the previous incumbent, was ousted in July and Arwel Ellis Owen, a former BBC news and current affairs executive, is the acting chief executive.

S4C programmes supplied by the BBC include CF99 (a political discussion programme); Pawb A'i Farn (the Welsh equivalent of Question Time); Ffeil, news for children and young people; Y Clwb Rygbi (live rugby); and coverage of the National Eisteddfod.

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